How to Develop a Frugal Mindset

Sometimes spending less is all about your state of mind.

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It is difficult to write a post on how to be frugal. If you mention any specific frugality tips you get comments such as “everybody already know this” or “nobody can actually do that,” usually on the same post. This week, instead of giving specific frugality tips, I am giving general advice on how to be frugal.

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I think the most important thing to change when becoming more frugal is your mindset. You need to get out of the mindset that money is the only way to solve problems and that money is the key to happiness. With a little creative thinking you will find that it is often possible to solve problems without spending money or at least without spending too much money.

You will also find that there are plenty of things that make you happy that cost no or very little money. I’ll have specific examples of the most common categories as this series goes on but I think it is best to establish the mindset first. You also need to be conscious of your spending. Many people buy a meal out, the latest bestseller, or some electronic gadget and don’t give the purchase a second thought. I am consciously aware of every purchase I make.

I don’t agonize over whether I should buy a McDonald’s extra value meal or not but I am aware that I am unnecessarily spending money and make a mental note of it. Making occasional small, unnecessary purchases of this sort won’t keep you from being frugal but allowing them to become a habit will.

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There are several tools you can use to help develop a frugal mindset. In my opinion the most important tool is to keep track of all of your spending. After doing this for a month or so you will see where your money is going and you should be able to identify areas where you don't feel you receive sufficient value for the money you spend. These are the areas you should cut back on if at all possible. You should find plenty of advice around the web on how to cut back on whichever area of spending you need to cut back on.

I prefer to keep track of my spending every month. Not everyone enjoys tracking their spending like I do so after you have identified your spending patterns you can just track your spending whenever there are significant changes in your spending or whenever you feel your spending is starting to rise again. Keeping track of your spending is an easy way to help develop a frugal mindset.

Andy Hough writes about frugality and living well on a small income at